EBA Clearing has issued a call for participation in its MyBank E-mandate Pilot to banks and service providers ahead of its planned start in October. Corporate treasuries and billers are keen to see a universal e-mandate solution that can be used to electronically collect single euro payments area (SEPA) Direct Debits (SDDs) from customers all across Europe, and this product, due for launch next January, is one of the key offerings seeking to fill this gap.

The aim of the comprehensive pilot is to test the MyBank electronic E-mandate solution for the SEPA Core Direct Debits function with regard to reliability, security and usability. The plea for participants was announced at the EBAday payments conference in Berlin, Germany.

The planned testing will involve banks, service providers and corporates which will co-operate to try to ensure the different components of the MyBank E-mandate solution work together seamlessly before the pilot’s roll out in October 2013 and the launch of the product in January, just before the 1 February 2014 SEPA compliance deadline.

The new mandate system will be built around the existing MyBank cross-border electronic e-authorisation solution from 64 European banks, which was launched in March of this year, using the SEPA Credit Transfers (SCT) format. This enables European consumers to pay for shopping via the internet or mobile channels without sharing account details with third parties, as it provides a protected link to the consumer’s own online bank account. It is effectively a portal linking customers directly to their own online bank, and EBA Clearing hopes its MyBank logo will be placed on merchant websites alongside Visa, MasterCard or PayPal payment options, for instance, so that banks remain part of the valuable, front-end financial services ecosystem. The e-mandate add-on planned for October 2013 is one of a number of useful extra services that can be added on to this comprehensive platform.

New E-mandate Offering

The electronic e-mandate service on EBA Clearing’s MyBank platform should help any treasurers that have not yet complied with the SEPA rules ahead of the 1 February 2014 migration end date by assisting them in overcoming the SDD ‘mandate management challenge’. Some European countries are insisting on customer permission before existing direct debits can be migrated over to the new formats and it is this that principally constitutes the mandate management challenge.

Service providers can participate in the MyBank e-mandate testing either directly or through a partnership with a participating bank. Banks are invited to join the pilot with a corporate customer to ensure that the end-to-end testing fully meets the requirements and expectations of all stakeholders, including treasury departments.

Interested parties can register for the MyBank E-mandate Pilot until 17 July 2013. The pilot will be kicked off in October 2013 and will run until the 1 February 2014 SEPA launch date. It is expected that MyBank users will be able to create, modify and cancel e-mandates for SEPA Core Direct Debits by the beginning of next year.

Reaction and Analysis

Commenting on the pilot Wijnand Jongen, vice president of operations and chair of the executive committee at the merchant body, E-commerce Europe, said: “Direct Debits are a very attractive and cost-effective payment method for online shopping. That is why E-commerce Europe has been calling for a pan-European electronic e-authorisation solution based on the SEPA instruments. [Online] E-merchants across Europe [can now] look forward to being offered such a solution by their payment service provider.”

According to Ivo De Meersman, general manager of group payments at KBC, “such a solution will also enable billers to streamline and automate key processes around SDD mandate management”.

“The fact that there is an entity that can help users manage SDD mandates is very good news,” said Magnus Carlsson, the new manager of treasury and payments at the Association for Financial Professionals (AFP) and ex-project manager for SEPA compliance at AB Volvo in Sweden. “There are, however, still some issues regarding storage of the mandates. For users it would be extremely beneficial if an entity like MyBank, in addition to creating, modifying and cancelling mandates was also legally allowed to offer a centralised mandate storage facility.

“With only eight months to the SEPA end date there are some questions that must be asked,” continued Carlsson. “How much of an impact can MyBank have when one looks to the entire single euro payments area? Another question is whether the MyBank initiative can easily handle more complicated users such as large multinational corporations, with their diverse needs?”

Treasurers are more interested in cross-border payments and automation than real-time payments, as they are consistently asked to do more with less, argues Rick Burke, head of corporate payments at TD Bank in an exclusive interview.